I live in Utah, and I have been seeing a married man for almost six years. No, I’m not ashamed. Although we both care greatly for each other, our relationship started as and remains a mutually beneficial one: money for me, companionship for him.

He has been my sole source of income for the last 5 years, paying every single expense I have, and he is happy to do so because he loves me, and I provide an escape from his miserable home life (his words). He’s been married a long time, and his only child is grown.

He is much, much older than I am, and he recently set up a life-insurance policy of $100,000 with me as the beneficiary. His wife knows nothing of me or the policy. We’ve taken steps to ensure I can get a copy of his death certificate without his family knowing.

He is mentally sound (always has been) and in great health. I need to know if his wife would have any claim to that policy should she discover it after his death. What is the likelihood a lawsuit would be in her favor if she sued? Does it matter who makes the payments on the policy?

The Other Woman

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Dear Other Woman,

Shame is a terrible, destructive force in individuals and societies, and I would not wish it on anyone.

Married life is more complicated than many people care to admit. Some marriages have “don’t ask, don’t tell” arrangements. Others are marriages of convenience. And others keep one person completely in the dark about their spouse’s infidelities. And, yes, some wives are probably glad to have time and space for themselves, and would rather others listen to their husbands.

To your question, Utah is an equitable-division state, so a challenge would be risky and expensive. However, a spouse may have a right to claim in one of the nine community-property states, under the assumption that marital funds were used to pay the premiums.

According to Dupont & Blumenstiel, a law firm based in Dublin, Ohio, in a case like this “a strange result can occur when community funds are used to purchase a policy and the surviving spouse is not made the beneficiary of the full proceeds.”

“In this case, the IRS believes that although one-half of the proceeds are includable in the deceased spouse’s federal gross estate, in certain circumstances the surviving spouse may have made a gift of that spouse’s half of the proceeds to the named beneficiary,” it adds.

Still, it’s usually a complicated and prolonged process to even attempt to break a life-insurance policy, which is a legal contract between him and his insurance company. According to Heban, Murphree and Lewandowski, a law firm based in Toledo, Ohio, “This process is not easy to navigate.” His wife could also have to prove the policy went against his intentions.

Your partner is not being transparent in life, and only in death is he prepared to reveal the truth about your relationship.

“While it is possible to dispute beneficiaries on a life-insurance policy, doing so creates a tremendous amount of cost and takes a lot of time,” the law firm says. “It also forces the rest of the estate to stay open, preventing the probate courts from closing the estate and distributing its assets. While the estate is held in the courts, fees, taxes, and other penalties will continue to build.”

“To avoid this, some families will take the dispute to mediation or arbitration to work out a settlement. This takes less time and costs less money. In this process, the interested parties can figure out a way to split the benefit to avoid a costly and lengthy court battle. This type of settlement can protect the estate from unnecessary expenses,” it adds.

As to your other question, it depends on the terms of the particular policy, but the insurance company is mostly concerned that the premiums are paid in full, per the agreement. Ultimately, one can’t predict how people react in times of grief. Your partner is not being transparent in life, and only in death is he prepared to reveal the truth about your relationship. That price of that is $100,000.

It is also a price that will be borne by both you and his wife upon his death.

The Moneyist: ‘I feel un-American’: I was broke in my 20s, and live in fear of debt. My wife wants to upgrade our home and life. What do I do?

You can email The Moneyist with any financial and ethical questions at qfottrell@marketwatch.com.

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